Today: Blanc Burgers Smashes Groupon Record, Explains How the Game is Played

Oh, ye of little faith…

How many Groupon deals have to go down before skeptics concede that – if structured properly – the half-price marketing schmoozes are win-win deals? Good for buyers, good for sellers.

How about a record-smashing 20,150 Groupons?

That’s how many $10 gets you $20 Blanc Burgers Bottles deals were sold over the weekend by Groupon.

How businesses can afford to sell food for 25 cents on the dollar seems to be the main question.

Simple, says Blanc Burgers main man Ernesto Peralta.

"To me, the only reason we do Groupon is it’s a marketing tool to get people to come into the restaurant and like it and talk about it," Peralta explains. "We have a new menu. We have a new look. We opened up the back room. We have new appetizers, new burgers, new desserts, new cocktails. And I want people to come see it. So to me, this is the best opportunity to get new people to come see us. Or people who haven’t been here in a while."

As for the almighty buck…

"It’s not a money making technique," Peralta says. "It’s a marketing tool. Some businesses spend money on radio advertising and on TV and newspaper ads and there’s no guarantee it’s going to bring in 20,000 people. Groupon claims to have 400,000 people (in this market) and at least 400,000 people read the name Blanc over the weekend."

Got that?

Not to belabor the point – but for skeptics sake – how does one make money at 25 cents on the dollar?

"We don’t," Peralta reiterates. "We’re not making money, but we’re creating an experience. We’re creating exposure. And I would say 90 percent of the people who come in with a Groupon spend more than the Groupon is worth."

For example, my party of three at lunch yesterday racked up a $55 check ( no cocktails, one dessert).

"And 60 to 70 percent of the people who come in have never been to Blanc before so it’s great to get our name out there," says Blanc’s Brian Wilson. "We don’t lose money on Groupon – there’s no way we lose money. Everybody always spends more than $20."

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32 Responses to Today: Blanc Burgers Smashes Groupon Record, Explains How the Game is Played

  1. jjskck says:

    Well, “we’re not making money” (Peralta) sorta contradicts “there’s no way we lose money” (Wilson).

    But “…60 to 70 percent of the people who come in have never been to Blanc before…” Come on. You don’t sell 10 times as many Groupons as most every other restaurant because you’re reaching a whole new crowd that suddenly decided to give you a try all at once. You break records because people who already know about you are buying 3 at a time.

    And I think that’s the long-term risk – creating the expectation that there will always be a discount. Blanc is better-positioned than most to be able to handle that.

  2. smartman says:

    George Strait Says
    I’ve got some oceanfront property in Arizona. From my front porch you can see the sea. I’ve got some oceanfront property in Arizona and if you’ll buy that I’ll throw the Golden Gate in free.

  3. Fred Flintstone says:

    Old Retailers Joke
    There’s been a big sign on top of the furniture store for years that reads:

    WE SELL EVERYTHING BELOW COST

    When asked how he’s managed to stay in business for so long, selling below cost, the owner lamented, “We make up for it in volume.”

    if Blanc Burgers think they can pull themselves out of the hole they’re in by giving away food, they are sadly mistaken, and I hope they didn’t sign a long term lease.

    Over the years, I’ve learned that when you see a store (of any kind) go on a marketing blitz or buy huge sums of ad’s that they didn’t normally buy, they are on their way out, and the advertising blitz is a last gasp effort to get some cash flow.

    Enter Groupon.

  4. bschloz says:

    How fast can you dance?
    20,150
    Since when did coupon redemption’s become as popular as box scores? LOL …How many haircuts did Fantastic Sams do over the weekend? I guess its newsworthy. Maybe we can see Ed McMahon style over sized Blanc check from Groupon for $100 ger
    My senses are telling me Ernesto cut a better deal for the Burger promotion..things we will never know the real answers to…like number of Groupon users in this area? Wild West.

  5. Markus Aurelius says:

    hey if it works for the federal government..
    …then it ought to work for Blanc Burgers, right? Oh wait….that’s right it’s not working for our federal government so well……guess this means when Blanc Burgers go out of business a Chinese restaurant will take its place, right?

  6. Hearne Christopher says:

    Remember, the restrictions have increased each time they’ve done it. And they only do it like twice a year. And who knows how many (if any) times they may do it again in the future.

    Don’t see it as a contradiction at all. Not making money onthe $20 Groupon itself, it what Peralta is saying. Not losing money on the overall deal – because people spend more than the Groupon allowing Blanc to recoup its discount is what Wilson is adding. Pretty simple math.

  7. Hearne Christopher says:

    Let’s see you try to sell 20,000 of ’em

  8. Hearne Christopher says:

    It’s a cutting edge marketing phenomena (as opposed to a hair cutting phenomena). And one that a three year-old KC company set a national record with. 400,000 locals signed up to a company that has barely been in the KC market much more than a year? I’d say that’s news.

    But I will try and swing by Fantastic Sam’s in Ward Parkway Center and get some digits for you!

  9. Hearne Christopher says:

    That’s deep!

  10. jjskck says:

    Hearne: “Remember, the restrictions have increased each time they’ve done it.”

    And this is key. This round wasn’t valid for lunch, which benefits them two ways: it helps only their evening business (their lunch business doesn’t really need the help), and their higher dinner prices all but ensure that every couple is going to spend more than the $20 face value.

    I absolutely agree that this one is structured in such a way that minimizes the “giveaway” portion of the food.

  11. Hearne Christopher says:

    Good point. And don’t forget my lunch for three sans alcohol with only one dessert was two and one half times the amount of the Groupon. Put dinner and alcohol into play and you can start to see the math. Which I agree is win-win. Hey, 10 bucks is 10 bucks.

  12. bschloz says:

    “It’s a cutting edge marketing phenomena”
    Sign Twirling is a cutting edge marketing phenomena
    That little yellow postit on the front of he Star is a cutting edge marketing phenomena
    Who knows maybe AOL will buy Groupon or Groupon will buy AOL.
    Of course I’m sour grapes that I didn’t invent the Deal of The Day.
    Saw that Groupon launched a deal site today with Expedia.

    I saw a good movie doc. a couple weeks ago “POM Wonderful Presents: The Greatest Movie Ever Sold”
    Spurlock is a bright guy…made me laugh..
    He had an interview with East Coast marketing guru…who had the best line of the movie.
    “YOU HAVE TO BE VISIBLE TO BE CREDIBLE” So from that perspective YES –there is more to these promotions than just numbers.

    OT: Is it going to be a long hot summer?— No Place To Hide– Double Dip in Housing– Jobs not happening– Bonds Rallying into the face of oblivion–stimulus expires in 30 days—Greece 2yr. yielding 25%…
    So we can now set the table for QE3 which will make Food and Gas go up in hilarious fashion —while artificially making our 401k’s not go down…doesn’t look like we can do both. I sincerely hope the next $Tril is spent on energy and jobs. $18 Hamburger Lunches indeed!

  13. Rainbow Man says:

    i am drawing a blanc
    Trendoid twerps who wouldn’t know a good bottle of wine or a fine dish if they stepped in it go into Blanc and shell out 12 bucks for “burgers.” These are the same idiots who buy jeans that are artificially weathered and pay $5.00 for a Pabst. This is what we have here these days. Social stratification by the burgers you eat.

  14. eric says:

    out of these previous comments, i would like to know how many people have actually taken a risk of opening their own restaurant?
    it seems to me that it is all hear say and unfounded comments. blanc burgers and bottles continues to get recognition, how is that going to make them go out of business, they have grown into 3 succesful restaurants and presence at the stadiums. they must be doing something right!

  15. smartman says:

    @eric
    You don’t need to be a junkie to know heroin is dangerous.

    Blanc is entering the Ponzi scheme phase of the Groupon phenomenon. They are now betting heavily on DINNER ONLY patrons to purchase booze….. with 400% markups as part of their dining experience to offset the previously incurred losses from food.

    Groupon also touts the Blanc numbers in their sales pitch to lure in other suckers. I would not be surprised, as others have suggested that Blanc may have better commercial terms than the standard Groupon deal.

    It’s just another twist on the worlds oldest profession and guess who’s getting fucked?

  16. Rainbow Man says:

    yeah eric…
    I have done it Eric. And I lost my ass. I am always in awe of the operations who do well because I know how hard it is. Everything has to click, and the owner operator has to be flawless. It also taught me how to spot a struggler. And I think Blanc is struggling. If they were not… their locations would be updated on their website right now. It says the Omaha location is coming soon in February. And… you should get a different atmosphere for those prices…. It is a trend, and people see through it. You can get a damned good burger a lot of places for $7. If I am spending any more than $20-25 per person… I am not wanting to be looking at people drinking orange pop out of a bottle.

  17. chuck says:

    Lot of really great comments by guys way
    smarter than me. I am terrible with money and this shit is way outta my paygrade.

    I do think that a guy named Ernesto Peralta should be one of the Three Tenors, or a hit man.

  18. TigerVIP says:

    Blanc Plaza Location…
    is killing them. And that I know for a fact. They lost on the Lee’s Summit (B2) location and the Mission Farms location continues to be their best, though not what it was. Groupon is what it is. We all get the daily deals and in some cases it definitely makes us aware of businesses that we would not be aware of otherwise. They do touch a far greater number of people than a radio spot or print advertisement ever would. At some point though you begin to cheapen your brand and if your business was doing great selling things at full retail, why would you continue selling coupons for less than retail? Not a good sign for Blanc, as their business model has become more and more diluted with all of the trendy burger joints entering the fray over the last couple of years.

    * Groupon does NOT negotiate the split. It’s 50% and paid out over the course of a few months.

  19. eddie says:

    Groupon DOES negotiate with great performers…I know, I’ve done it twice and they are asking me again..
    Plaza location is at least twice as busy as Leawood store, I have worked with their bookkeeping company. 20000 people can’t be wrong, every time I’m there they are busy and growing. Keep it up blanc and continue to support local.

  20. Fred Flintstone says:

    Keep whistling
    Through that graveyard Eddie. Maybe your perception will become reality.

    My longtime retailer father-in-law used to say, “Any damn fool can give it away, a great retailer sells it at regular price!”

  21. bschloz says:

    $50 for $100 Worth of Stock
    IPO is a reality now…should be interesting–don’t believe they are profitable at this point? 8,000 employees …majority of Rev. done overseas. Wall Street says growth companies don’t need to turn a profit? History doesn’t repeat itself but it often rhymes.

    Quote of the day “Groupon has no competition. Except anyone who feels like competing. Buffett wouldn’t spit in that moat. $GRPN”
    –Josh Brown

  22. jjskck says:

    Groupon IPO
    “In Q1 2011, Groupon earned $644.7 million in revenue, but it still wasn

  23. Hearne Christopher says:

    Was that when Amazon.com debuted. Remember all the red ink Amazon churned up all those years?

  24. Hearne Christopher says:

    Omaha Blanc is open

  25. Hearne Christopher says:

    I’m with Eric. I mean, really. All the experts who haven’t a clue about running a successful restaurant.

    The very fact that 20,000 people – right or wrong, for crying out loud – went out of their way to buy these babies hardly smacks of a biz on the bust.

  26. Hearne Christopher says:

    I’m told, by pretty good sources, that they do negotiate now. Maybe not with everybody.

    Remember, just because Blanc has done this – what? – three times, doesn’t mean they will do it again. They’re tightened up the restrictions each time and yet more than 20,000 sold. The people who don’t get or buy Groupons are likely all but unaware of these deals. So how does it cheapen?

    The buy one get one folks have been playing their tired game for decades. And still some of the top eateries in town sign on for the dorky Star Card.

    This deal is far leaner and cleaner.

  27. Hearne Christopher says:

    Your father-in-law, huh? A longtime retailer?

    Groupon wasn’t even close to be around during his day and age. Times change. And what most of you comment crowd naysayers focus on is the $. When the marketing aspect is equally, if not more important.

    What kind of return do you get from writing a check to a radio station?

    Hey, 20,000 people bringing in at least one other person and spending double the Groupon ain’t bad.

  28. jjskck says:

    Amazon sells actual products and have actual infrastructure, and it turned out they were a rare surviving exception in the dot-com world. And if you bought that shining example of e-commerce in 1999 you didn’t get back to break even until 2009.

    If you want to invest in Groupon, be my guest. They might survive–even thrive–but no way in hell I’m taking that bet.

  29. kansas karl says:

    The only reason this guy is successful with groupon is he has built a reputation through other media. He had good reviews in the paper and on line. He has done trade with radio to promote the name of his business. Now he is the king of Groupon…..for giving away part of his profit, does he make up the difference in tips for his servers, very few tip on the coupon?

  30. Fred Flintstone says:

    Blanc Burgers or Groupon
    Someone remind me which one we are ragging on?
    I have no problem with Group-on (PT Barnum said a sucker is born every minute)
    My commenting was on Blanc Burgers (the suckers)and their “success” with their Group-on ad.
    Selling something below your cost, and doing it 20,000 times no less, and calling it a “success” because it brought more people to and informed of, their restaurant, if a recipe (pun intended) for disaster.
    Of course when the business model is fixated on trying to sell $12-$20 hamburger plates, you’re in a hole to start with.
    Like I said before, just don’t sign any long term leases, Blanc.

  31. eddie says:

    Like I said before….I know the group very well, and I know servers are making money and they have turned down two offers from national restauraant companies who wanted a piece of the action. Blanc burgers is in a very profitable position and their investors could not be happier with their perfomance, they are also in negotiations to open two more restaurants!

  32. harely says:

    MUST BE DOING SOMETHING RIGHT…
    I PREFER $4.00 burgers…wasnt impressed with blanc…bu if people are willing to
    spend that much money on a hamburger…good for them…i wish them luck.
    But they better move fact because wihini 12 months therewill be a expensive
    burger joint on every corner of every town becuase this can becopied easily.
    Don’t think this will last long…too easy to copy and too easy to start…
    and according to the republicans we’re headed to another recession which will
    make it even harder for expensive burger joints to stay in business.
    How some restuarants stay open is besides me..i don’t eat much so the epxeirnce
    of eating ast some overpriced joints doesent excite me.
    MORE OVERPRICED PLACES TO EAT

    PLAZA 3 …..WAY BAD
    SULLIVANS……
    RA: only go there during happy hour for cheap sushi….otherwise its
    outrageous.
    BEST JOINTS OFR THE BUCK
    BONEFISH
    JACK STACK
    EL RANCHITO…BE SURE TO ORDER LITE ON THE PESITCIDES
    MCDONALDS….THOSE NEW FROSTYS ARE INCREDIBLE….

    BESIDES THAT I LOVE TO COOK AND WE DO IT ALL THE TIME AT HOME…
    ADD SOME WINE…SOME SEX AND WHAT’S BETER IN LIFE THAN THAT~!

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